Tavares Wins Tax Fight, Bonus Battle Continues

The feds just took a hit in court over a big tax fight with Toronto Maple Leaf star, John

Tveris.

The Department of Justice wanted to question someone from Maple Leaf Sports and Entertainment

about a $15.3 million U.S. signing.

Bonus Tavares got back in 2018.

But the judge shut that down on March 27th, saying they should have asked Tavares himself

first during his own examination.

Tavares, a 35-year-old Mrs. Saga native and former team captain, argues that bonus was

an inducement to lure him from the U.S. back to Canada.

So it should only face a 15% tax rate.

The Canada Revenue Agency disagrees, hitting him with an $8 million Canadian bill at over

50% top rate after reassessing his 2018 return.

He appealed to tax court in January 2024.

Things like Tveris are pushing back hard, and he's not alone.

Former Leafs, Patrick Marlow and Jake Muzzan filed similar challenges against the CRAs.

Take on signing bonuses.

The agency insists these payments tie to playing duties, not just luring talent.

In the ruling, Justice Edward Cook pointed out the government already questioned Tavares

and got follow-ups, so they didn't prove they needed MLSC input.

He awarded Tavares costs on the motion, but the core tax dispute is still pending.

This procedural win keeps Tavares' appeal alive, as more athletes test the CRAs' rules.

Could reshape how signing bonuses get taxed in pro sports?

Stay tuned for the next play.

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